Blue Cross, Bronson in dispute over reimbursement

Patients in Battle Creek and southwestern Michigan may face higher costs if a hospital system and insurance provider can’t agree on a new contract.

Kalamazoo-based Bronson Healthcare is in negotiations with insurance provider Blue Cross Blue Shield of Michigan over a new reimbursement agreement, including a move to what Blue Cross calls a value-based plan.

Blue Cross said in a statement to the Enquirer Wednesday that the organization is committed to working with Bronson to secure an arrangement with the hospital for reimbursement.

“In the meantime, Bronson has notified Blue Cross that it will no longer participate in the BCBSM PPO and Traditional network and Blue Care Network HMO starting February 16, 2015,” the statement said.

Bronson Director of Public Affairs and Communications Susan Watts, however, said Thursday that wasn’t true.

“The dialogue negotiations are active and we are very hopeful that we will come to terms far before Feb. 15 and there won’t be any disruption in service or care to employers or to patients,” Watts said.

Blue Cross said in December it had reached agreements with 71 Michigan hospitals in 18 hospital systems. When a health care provider is considered “in network” for an insurance provider, the cost will typically be lower than if a patient chooses an “out-of-network” hospital or doctor.

“For decades, hospital reimbursement was based on a fee-for-service reimbursement model, which pays hospitals for every service performed no matter how effective,” the news release explained. “By moving toward value-based reimbursement, Blue Cross incentivizes hospitals and physicians to eliminate re-use and over use of care, and prevent unnecessary re-hospitalizations.”

Both Bronson and Blue Cross said these negotiations only apply to commercial insurance and Blue Care Network products, and not Medicare programs offered through the insurer. Bronson Communications Specialist Carolyn Wyllie said Friday that only hospital inpatient and outpatient services are affected by the negotiations.

Kalamazoo-based Borgess Health and Oaklawn Hospital in Marshall are in-network hospitals for Blue Cross. In a statement released by Bronson on Friday afternoon, however, the provider advised Blue Cross patients to continue scheduling services there, even if they come after Feb. 15.

That same statement denied a claim that Bronson was seeking 25 percent increase in reimbursement.

“As not-for-profit community hospitals, Bronson is not asking for more than we deserve, only to be paid equitably so we can continue to provide high quality care for patients and deliver essential healthcare services that people in this region rely on,” the statement said.

According to data provided by the federal Centers for Medicare and Medicaid, Bronson Battle Creek tends to match national benchmarks for readmissions, complications and deaths that could be prevented.

In response to an Enquirer request for comments, Blue Cross Vice President for Corporate Communications Andy Hetzel said in a statement the organization wants Bronson in its network at an affordable price for members.

“We are continuing to work together with the team at Bronson to share points of view, and we are hopeful to have a new contract in place before Feb. 15 that allows for continued access to Bronson hospitals for Blues members,” Hetzel was quoted as saying in the release.

Watts said Bronson is seeking reimbursement comparable to arrangements with other hospitals. She would not provide financial data, saying negotiations are ongoing.

“We’re very supportive of value-based purchasing,” Watts said. “We do that with other payers. Bronson Methodist is one of the Medicare demonstration projects for bundled payment, which is a form of value-based purchasing.”

Watts said she couldn’t immediately say how much of Bronson’s business comes from patients with Blue Cross coverage.

“We will work with them to arrive at a payment system that is equitable from Bronson’s perspective and I’m sure from their perspective,” Watts said.

Call Andy Fitzpatrick at 966-0697. Follow him on Twitter: @am_fitzpatrick